First Advantage SafeRent Releases Multifamily Applicant Risk Index
First Advantage SafeRent, Inc., a wholly owned subsidiary of First Advantage Corporation (NASDAQ: FADV) and the nation's leading and most innovative provider of screening and risk management services for the multifamily industry, announced the release of first quarter 2008 multifamily applicant risk statistics.
The Multifamily Applicant Risk Index (MAR Index) is based on traffic quality scores from First Advantage SafeRent’s statistical screening model and is updated quarterly to provide property owners and managers with a benchmark with which to compare their portfolio’s performance. With this unique applicant risk index, property managers and owners are able to compare their applicant quality trends with that of the average MAR Index trends. This comparison indicates whether their portfolio is performing above, below or at market levels with respect to attracting and securing high quality, paying residents.
The first quarter national MAR Index, including studios, one-, two-, three- and four-bedroom units (BR), was 100. This is a 1% increase from the fourth quarter 2007, which confirms a trend of seeing higher MAR Index values in the first quarter over the fourth quarter of the prior year. Compared to the first quarter 2007, the MAR Index is the same value of 100. When comparing applicants for one- versus two-bedroom units, the MAR Index is slightly higher for one-bedroom units at 101 compared to 100 for two-bedroom units in the first quarter (see Graph 1).
Regionally, the Northeast has the highest MAR Index with a value of 110 while the Midwest and South have the lowest MAR Index with a value of 97 this quarter (see Table 1).
From a Metropolitan Statistical Area (MSA) perspective, the three MSAs with the leading decreases in the MAR Index were Dallas/Fort Worth, TX; Denver/Boulder/Greeley, CO; and Memphis, TN-AR-MS with decreases of 4 points. The three MSAs with the leading increases in the MAR Index were Austin/San Marcos, TX; New York/Northern New Jersey/Long Island, NY-NJ-CT-PA; and Nashville, TN with increases of 5, 5 and 4 points respectively (see Table 2).
Understanding the Multifamily Applicant Risk Index (MAR Index)
The MAR Index is published quarterly by First Advantage SafeRent. It provides trends of national and regional traffic quality scores whereby a lower index value indicates an applicant pool with a higher risk of not fulfilling lease obligations. A MAR Index value of 100 indicates that market conditions are equal to the national mean for the index's base period of 2004. A MAR Index value greater than 100 indicates market conditions with reduced average risk of default relative to the index's base period mean. A value less than 100 indicates market conditions with increased average risk of default relative to the index's base period mean. The MAR Index is derived from First Advantage SafeRent’s Statistical Screening Model – the multifamily industry’s only screening model that is both empirically derived and statistically validated. First Advantage SafeRent’s Statistical Screening Model was developed from historical resident lease performance data to specifically evaluate the potential risk of a resident’s future lease performance. The model generates scores for each applicant indicating the relative risk of the applicant not fulfilling lease obligations. A lower score indicates a more risky applicant.
About First Advantage SafeRent
First Advantage SafeRent, a wholly-owned subsidiary of First Advantage Corporation, is the nation’s leading and most innovative provider of screening and risk management services to the multifamily housing industry. Through its offices in Rockville, Md., and more than 40 support offices nationwide, First Advantage SafeRent offers a single source for resident screening services, property performance evaluation tools, renters insurance and employment screening. More than 39,000 properties rely on First Advantage SafeRent every day to help them attain the highest quality residents and maximize profitability. First Advantage SafeRent leads the industry in innovations and enhancements designed to make the decision process faster, easier and more accurate. For more information, visit www.FADVSafeRent.com.
First Advantage Corporation (NASDAQ: FADV) provides innovative products and services that mitigate risk by helping businesses, non-profit organizations and government agencies make more informed decisions. Headquartered in Poway, Calif., the company has more than 4,800 employees in 11 countries that support over 90,000 clients globally. More information about First Advantage is available at www.FADV.com.
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